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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › variances
for a product r mpv for august was $1000F and muv 300A
standard usage per unit is 3kg standard material price is 2 per kg
500 units were produced in the period opening inventory on raw materials was 100 kg and closing inventory 400kg material purchases in the period were.
sir please help thnx in advance
Since the usage variance is 300A, and the standard cost is $2 per kg, it must mean that they used 150 kg more than they should have done.
They should have used 500 x 3 = 1,500 kg and so they must have actually used 1,650 kg.
Because of the inventories, they must have purchases 1,650 + 400 – 100 = 1,950 kg.
They should have paid 1,950 x $2 = $3,900. However, because there is a favourable expenditure variance they must have actually paid $2,900.
thank you very much sir
God bless u….
You are welcome 🙂